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A Critical Time for One of Biotech’s Underdog Success Stories

If investors were to read over the history of Critical Outcome Technologies, Inc. (TSX-V: COT), they’d think it came out of a movie. A little-known and chronically underfunded Canadian company conquering the odds to potentially cure cancer through a novel approach the rest of the scientific community had long given up on. It’s your classic underdog story.

But as evidenced by Critical Outcome’s announcement in December that its lead cancer drug candidate COTI-2 was moving into human clinical trials, the story and the science are very real. What makes COTI-2 special is the focus on mutated or inactive p53 protein. P53 which normally acts as a tumor suppressor frequently leads to cancer when it is inactivated through gene mutations. COTI-2 causes reactivation of the important cancer suppressing p53 protein. Once p53 is reactivated, the cancer cells kill themselves through a process called apoptosis. For decades, medical science and the pharmaceutical industry were unable to successfully identify and develop a drug capable of effectively killing cancers with p53 mutations. So the fact that Critical Outcome has managed to progress this far with COTI-2 is quite remarkable.

While the drug has the potential to treat multiple indications, the Phase I clinical trial will look to evaluate COTI-2 in patients with advanced gynecologic cancers at The University of Texas MD Anderson Cancer Center ("MD Anderson") to determine the maximum tolerated-dose, pharmacokinetics, and safety of COTI-2. The trial is planned to include up to 46 women with advanced gynecologic cancers who have failed conventional therapy.

“This is very big for us both on a personal level and on a company level,” said Dr. Wayne Danter, Co-Founder and CEO of Critical Outcome. “It's sort of a dream come true experience. We started out several years ago wondering if we could find a drug that will make a difference, and then took it through all the pre-clinical development with all the costs and facing all of the potential for failure, and now actually getting it to people. To think, this little Canadian company with little to no resources but great science and perseverance actually gets the drug to the clinic and to people where it's a got a chance to make a real difference. It’s a very big event for us, and some validation of the underlying technology and validation of our “disruptive” approach to things. We have had a very loyal group of investors, and I think it validates their faith in us getting it done eventually.”

In addition to gynecologic cancers (ovarian, cervical and endometrial), Critical Outcome is looking at other indications including head and neck, acute myeloid leukemia (AML), and Li-Fraumeni Syndrome.

“In the US alone, the market potential for COTI-2 for ovarian cancer is a billion-dollar market,” Dr. Danter said. “All of the indications that we're looking at now would qualify as orphan indications, and based on anticipated reimbursement for the indications, all of them are billion-dollar markets just in the US alone.”

How COTI-2 Works

According to Dr. Danter, the p53 gene has been studied in labs around the world since the 1970s as a potential target for cancer therapies. Some of the revelations were that p53 was a tumor suppressor, and p53 mutations occurred in 53% of all human cancers.

“The vast majority of molecules that are currently used to treat cancer are inhibitors,” Dr. Danter said. “They block the activity of some protein in the cell, which interferes with the cancer cell's ability to function. COTI-2 is a different molecule altogether because it actually activates inactive p53 protein rather than inhibiting some cellular process. So by reactivating p53 in cancer cells, some of the most important cell functions like cell cycle arrest and apoptosis are turned on. As a result, the cancer cells kill themselves through apoptosis.”

He adds that for the better part of the past three years, the company has been focused on trying to better understand how COTI-2 does what it does. In basic terms, COTI-2 binds with zinc which is transported into the cell where it reactivates p53 through refolding of the mutated and misfolded protein.

“When a cellular protein is made from the genetic instructions, it generally undergoes three dimensional folding,” Dr. Danter said. “It starts out looking like a string of spaghetti and it ends up looking more like a small ball of string. It is when the protein is in this properly folded configuration that it has activity. When it is unfolded or misfolded, it loses activity. That’s why the p53 mutations generally lead to cancer, because the misfolding of the p53 protein leads to a loss of function. By binding COTI-2 to zinc and then presenting zinc to the misfolded p53 protein, it results in refolding of that misfolded protein. When the protein is refolded, it regains cellular function, which triggers the cancer cell to undergo apoptosis.”

A Serendipitous Discovery

So how did a small Canadian company that nobody has ever heard of accomplish such a remarkable feat where the brightest minds and deepest pockets around the world were unable to for decades?

“We've had to deal with a fair amount of skepticism, of course,” Dr. Danter said. “I had been doing some bioinformatics research using the National Cancer Institute's Molecular Targets Database, looking at the possible mechanisms of action for COTI-2. What I kept coming up with was the p53 story. We had this interesting scientific conflict, which sometimes occurs, where one line of our research was very clearly showing COTI-2 was an AKT inhibitor, and then this other line of activity that suggested it had a very different mechanism of action. We had a lot of pushback from the pharmaceutical companies saying that COTI-2 was way too effective and the toxicity was way too low for it to be an AKT inhibitor.”

So Dr. Danter enlisted the help of Dr. Gordon Mills of MD Anderson to look at the COTI-2 program. Dr. Mills said the molecule was, in fact, most likely not an AKT inhibitor.

“That was the first big sort of turning point about three years ago now,” Dr. Danter said. “I remember asking Gordon at the time if he thought that COTI-2 might be a p53 activating drug. He was intrigued and took it into his lab to begin some very important research that not only confirmed some of our initial results but led to our current understanding of how COTI-2 works. It is a very novel molecule and Gordon’s work has been an important part of this story.”

Why Gynecologic and Ovarian Cancer

While COTI-2 has the potential to treat a number of indications as well as accelerate through the bottleneck of identifying clinical candidates to be validated quickly, as Dr. Danter says, the company chose to pursue gynecologic and ovarian cancer first for a number of compelling reasons.

In addition to being an area of expertise for Dr. Mills, the landscape for these particular cancers has a very high prevalence of p53 mutations. “For women who have advanced serious ovarian cancer, about 97% of those women will have p53 mutations,” Dr. Danter said. “Similarly, although not quite as high, p53 mutations are also common in uterine cancer and cervical cancer. So there is a very large unmet medical need and that was the main reason.”

Two other compelling reasons include the fact that COTI-2 has been granted orphan status by the FDA for treating ovarian cancer, and that there have not been any noticeable advancements in gynecological and ovarian cancer therapeutics for the last 10-15 years. Dr. Danter believes this could translate to a relatively low hurdle to FDA approval and licensure for a molecule that would improve treatment for women for gynecological and especially ovarian cancers.

As the study gets underway, Dr. Danter says Critical Outcome will be very communicative to the investment community on a number of fronts, including announcements on how the Phase I trial is progressing, developments on other indications for the company’s pipeline, a potential new office in Boston, and much more.

“One of the important things that we told shareholders initially was that we weren’t a one trick pony,” Dr. Danter said. “We have a platform technology, a pipeline of drug candidates and we're now in the process of identifying our next clinical candidate. So when COTI-2 is successful and finds a good home, we'll move on immediately to our next clinical candidate, which we should be announcing in the next three months”.

“We plan to grow, and we plan to develop as many of our assets as we can to use our technology and to make a real difference in people's lives.”

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